UCC Performance

Question 1

Seller’s Obligation of Tender + Delivery

Answer 1

1. Non-Carrier Cases

Under the UCC, if the parties does not intend that the goods be delivered by common carrier, then seller must notify buyer and hold conforming goods at the buyer’s disposition for a sufficient time for buyer to take delivery.

* POD - Seller POB - if no provision otherwise, place of delivery = seller place of business

2. Carrier Cases

Under the UCC, if the parties intend that the goods be delivered by common carrier, then …

a. Shipment K - … seller must put the goods into hands of carrier, make reasonable k for shipment, notify buyer of shipment, and tender the shipping documents to the buyer.

* If material loss or delay occurs as result of lack of reasonable contractor notification, then buyer may reject goods.

b. Destination K - … seller must tender delivery at a specified location, hold conforming goods at the buyer’s dispoition, and notify the buyer.
c. FOB K - FREE ON BOARD - … ???? BOOK SUCKS
d. FAS K - FREE ALONGSIDE SHIP - … seller must deliver goods alongside a designated vessel within the ordinary course of business.
e. CIF - Cost, Insurance, Freight - pricne includes cost of goods, insuring goods, and transporting goods

C&F - Cost and Freight - price includes cost of goods and transporting goods.

Question 2

Buyer’s Obligation to Pay

General

Answer 2

Under the UCC, when a conforming tender is made the buyer is obligated to accept and pay the price under the contract while rejection amounts to a breach of contract.

* Shipment Under Reservation – if k does not specify the method or form of payment, seller may send under reservation, meaning that carrier will hold goods until buyer pays

* Tender of Payment – three situations:

1. Delivery & Tender Concurrent Conditions – unless otherwise agreed, tender of payment is condition to seller’s duty to tender and complete delivery
2. Sufficiency of Tender of Payment – any means sufficient or is within oridinary course of business; seller may demand payment in cash but must give reasonable extension of time
3. Payment by Check – if payment made by check, payment is conditional until the check is paid or dishonored

Question 3

Buyer’s Obligation to Pay

Right to Inspect

Answer 3

Under the UCC, buyer has a right to inspect goods that are tendered, delivered, or identified to the contract for sale, unless the contract provides otherwise.

1. Prior to Payment – buyer’s right to inspect is a condition to payment; may occur at any reasonable time, place, and manner; may occur when held under reservation; parties can agree to particular time, form, place
2. When Not Entitled – if cash on deliver (COD) or other terms such as course of dealing or useage of trade preclude inspection before payment.
3. Expenses of Inspection – paid by buyer, but may be recovered from seller if goods to not conform and are rejected.